A rhodium-catalyzed oxygenative [2 + 2] cycloaddition of terminal alkynes and imines has been developed, which gives β-lactams as products with high trans diastereoselectivity. In the presence of a Rh(I) catalyst and 4-picoline N-oxide, a terminal alkyne is converted to a rhodium ketene species via oxidation of a vinylidene complex and subsequently undergoes a [2 + 2] cycloaddition with an imine to give rise to the 2-azetidinone ring system. Mechanistic studies suggest that the reaction proceeds through a metalloketene rather than free ketene intermediate. The new method taking advantage of catalytic generation of a ketene species directly from a terminal alkyne provides a novel and efficient entry to the Staudinger synthesis of β-lactams under mild conditions.